Investing in pre-sale is an art, especially for investment and finance lovers, since acquiring a property is often the safest way to shield your money. However, it is essential to know that when investing in a pre-sale, just as there are benefits acquiring at low costs, there are also risks that you must be aware of to minimize them.
What is a presale?
In the real estate world, we can define a presale as a development of either houses, offices, or land/lots; which you find for sale in the real estate market before or during its construction; in addition to this, there is still no condominium regime, that is, you would be acquiring a “future property” through a promise-to-purchase contract.
Here is a simple guide to help you make the best decision for your next investment.
• DELAYS IN CONSTRUCTION:
Before venturing to invest in pre-sale, you should know that it is very normal to come across construction delays that often go beyond the period of grace established in the contract. This is due to the fact that there are many factors in the realization of a construction, as well as several suppliers involved towards the same end.
Some of the factors that can delay a real estate project are the following: The size of the project, whether it is a very ambitious project or a small one, is an important factor; sales flow of the project or injection of capital to the development in question, that there are natural disasters and/or climatic conditions that affect the progress of the work, pandemics, changes in government, public works that directly affect private works, price increases or shortages in materials, lack of labor, delays of external suppliers/contractors to work, both materials and external services, municipal and state permits as well as their renewal.
Although construction is a world in which many people, various suppliers, and specialized areas participate, in the Rivera Maya, we find delays of between 3 and 8 months, which you should consider when investing.
• RENDERS VS REALITY:
When acquiring a presale, it is essential that you qualify the seller, developer, or builder from whom you are acquiring the property; sometimes the images that are presented to us on paper, render and/or plans, end up not meeting our expectations or exceeding them!
What can you do to avoid finding these kinds of surprises? First, visit the project showroom if it exists, and make sure that the qualities and equipment are detailed in your contract. If they do not have a showroom, visit and inspect previous constructions, request their CV, and visit their website to inspect their experience.
• LEGAL REVIEW:
In a presale, it is essential that you hire a lawyer specializing in real estate since, in most cases, you are buying a future thing on paper; therefore, the documentation of the presale should be reviewed in detail. The company, the identifications of the sellers, the deed that proves that the sellers are owners of the property and that the company from which you acquire is duly constituted.
We recommend that you make sure to establish penalties in case of delivery delays, specify the delivery date and the price, that you are comfortable with the payments after the down payment since you must make them in a timely manner, that your contract includes the list of finishes and detailed equipment in addition to the architectural plan of the unit you have chosen, in case you have requested any modification to your units, such as additional equipment or a change in the finishes through your purchase offer, make sure that it is also reflected in your contract as well as any other agreements made with the developer/builder.
IMPORTANT: Avoid developers who refuse to accept penalties or define how they will compensate you in case of delays greater than the extension of your contract.
•ASSESS THE DEVELOPER:
If you are considering investing in a presale, you must verify certain aspects of the developer/builder, such as the following:
1. Years of experience.
2. Number of projects completed/built.
3. References from agents and previous clients.
4. Find out if the developer has a history of delays, defaults, complaints, or others. Today you can digitally verify the company’s rating on social networks, Google Maps, and Profeco. Likewise, your real estate advisor will know about local market references and real estate information network.
5. Documentation in Regulation of the development and company and their construction permits are valid.
• WHEN YOU INVEST IN A PRESALE:
You become an investor; therefore, we invite you to invest safely, taking this guide into account in your next selection. Remember, the greater the progress of the work, the lower the risk – the higher prices. The lower the progress of the work, the higher the risk – the lower the price.
• When buying in presale, you buy at lower prices between 10 and 30% depending on the construction phase in which you invest.
• Advantage by selecting the best units available within the project of your choice.
• Time to finance your purchase from 1 to 3 years without interest (without having to go to a bank or financial institution).
• Various very attractive options for all kinds of budgets.
POINTS TO WHICH YOU SHOULD PAY ATTENTION
◘ Postponed delivery date in most cases, with an average of between 3 and 8 months.
◘ Wait for the construction period of 1 to 3 years to be able to enjoy your property.
◘ That the quality or the final result is not to your liking. To do this, remember to inspect its quality in previous projects or constructions.
◘ Yes or yes, walk hand in hand with a professional adviser who can help you choose the best options.
◘ Hire a lawyer specialized in real estate to review your promise of sale or trust contract, remember that both you and the developer will acquire responsibilities through it, and it is important that a professional in the matter can support you.
Yes, now you’re ready for the search. Contact one of our advisers and invest safely with the experts at Lotus Riviera Maya.